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DIRECTIVE No

DIRECTIVE No.500-TTg OF AUGUST 25,1995 OF THE PRIME MINISTER ON URGENTLY RE-ORGANIZING STATE-OWNED ENTERPRISES

To urgently re-organize State-owned enterprises according to Decision No.90-TTg of March 7,1994, and Directive No.272-TTg of May 3, 1995, of the Prime Minister, and at the same time, to organize the implementation of the Law on State Enterprises and the administrative reform program, the Prime Minister requests the ministries, branches and localities to do the following:

1. The Ministries, ministerial-level Agencies, the Agencies attached to the Government, and the People's Committees of the provinces and cities under the Central Government (hereunder referred to as the ministries, branches and localities) should promptly submit to the Prime Minister their overall plan to re-organize the State-owned enterprises under their management so as to fulfill the plan to re-organize centrally run enterprises by the end of September 1995 and the plan to re-organize locally run enterprises by the end of October 1995. These are master plans which need not be enclosed with specific dossiers.

2. The re-organization of State-owned enterprises to operate under the Law on State enterprises must be closely combined with the gradual abolition of the regime of direct management of State-owned enterprises by the ministries and the local administration as at present. This aims to improve step by step the situation in which many State-owned enterprises of the same industry or service operate on the same area, but are under the management of different ministries, branches and localities, particularly in the field of construction and engineering.

a/ In drawing up their master plans, the ministries, branches and localities should review all independent corporations and enterprises under their management; carefully weigh the re-organization of corporations and the formation of new ones under Decision No.90-TTg (hereunder referred to as Corporation 90), and the proposal for the establishment of more corporations under Decision No.91-TTg (hereunder referred to as Corporation 91). With regard to those independent enterprises managed by the ministries, branches and localities, they should be classified as follows:

- Major enterprises, or the merging of small enterprises into major enterprises to form companies with a managing board.

- Those enterprises which can become members of corporation 90 founded by the Ministries and the People's Committees of the provinces and cities under the Central Government as empowered by the Prime Minister. In case there are large-scale enterprises (operating in the same industry as Corporation 91 or Corporation 90) which have been founded or are being founded and operate in the same locality, then an official proposal must be made to the ministry concerned in charge of economic-technical branches to consider and merge them into specialized business corporations.

- Those enterprises, which until now have been operating not mainly for profit, shall be transformed into public utility enterprises if necessary.

- Those enterprises, which until now have been operating as non-business units with the non-business capital source granted by the State budget, shall be organized into non-business units directly under the ministries, branches or localities.

- Those enterprises managed by a specialized ministry shall be transferred to the locality concerned to re-organize along geographical line, if they are considered not necessary to join in a corporation or to operate as a public utility or non-business unit belonging to that ministry.

b/ For the time being, the construction branch and the engineering branch should cooperate with other ministries and branches to consider an initial re-organization on an inter-branch basis. The Ministry of Construction and the Ministry of Heavy Industry should discuss with the other ministries, branches and localities concerned to urgently complete a master plan for re-organization of those State-owned enterprises (at least the centrally-run enterprises) which are operating in the construction branch and the engineering branch, and submit it to the Prime Minister for consideration and ratification before September 10,1995 for use as a basis for the initial re-organization of these two branches.

3. The master plans shall be considered and ratified as follows:

a/ After the Deputy Prime Minister in charge of the branch or a minister empowered by the Prime Minister listens to the presentation of the plan and gives his opinion, the Minister concerned or the Head of the branch, or the President of the People's Committee of the province or city concerned, shall perfect the plan and consult the Central Economic Commission (for the ministries and branches at the central level) and the executive Party committee of the province or city concerned (for the localities) before officially submitting it to the Prime Minister for ratification. The Prime Minister shall empower the Minister or the Head of that branch, or the President of the People's Committee of the province or city concerned under the Central Government, to issue a decision on organization and personnel allowing each enterprise to register for establishment or re-establishment as stipulated by the Law on State Enterprises.

b/ To speed up the consideration and ratification of the master plans, the Prime Minister empowers:

- The Deputy Prime Ministers to directly listen to the presentation of the master plans by the ministries and branches at the central level under their management.

- Deputy Prime Minister Tran Duc Luong to directly listen to the presentation of the master plans of Hanoi City and Ho Chi Minh City.

- Minister-Chairman of the State Planning Committee Do Quoc Sam to directly listen to the master plans of a number of provinces and cities under the Central Government where there are many State-owned enterprises.

- Minister-Head of the Central Steering Committee for Renewal of Enterprises Phan Van Tiem to directly listen to the presentation of the master plans of the remaining provinces and cities under the Central Government.

4. The State Planning Committee, the Ministry of Finance, the Ministry of Labor, War Invalids and Social Affairs, the Governmental Pricing Committee, and the General Statistics Department, basing themselves on the assignment of work in Directive No.262-TTg of May 2,1995 of the Prime Minister, should urgently complete the draft regulatory documents on guiding the implementation of the Law on State- Enterprises, and submit them to the Prime Minister at the end of September 1995 at the latest.

Prime Minister

VO VAN KIET